Municipalization finds favor with Boulder council

City to continue talks with Xcel over alternatives

Creating a municipal energy utility appears to be a viable option with significant community benefit, a majority of Boulder City Council members said Tuesday night.

Nonetheless, the city plans to convene a joint citizens advisory group with Xcel Energy to explore alternatives that increase the amount of renewable energy that Boulder gets without full municipalization.

Some of the council members who opposed municipalization -- before the November 2011 election that authorized the City Council to pursue that option -- said the city should put any final plan to the voters for approval.

In a three-hour study session reviewing the findings of city analysis of energy options, council members asked questions about how fully risks and costs had been modeled.

Were future coal costs factored into Xcel's likely future rates? (To the extent possible, but there's a lot of uncertainty.) Did consultants take into account the effect long-term drought might have on hydroelectric power? (No, because water modeling is very challenging, but they'll see what they can come up with.) What if large industrial businesses sued the city over its decision? (City attorneys say they would be unlikely to succeed.)

The city's analysis found that Boulder could create a municipal energy utility that buys electricity from more renewable sources and uses more natural gas than coal, and that utility would be able to provide average rates that match or are lower than Xcel's and would drastically cut the city's greenhouse gas emissions. That means a municipal energy utility would meet the city charter's minimum requirements.

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City Council members did not vote Tuesday on whether to move forward with municipalization. There will be a period of public comment and open house meetings before an April 16 City Council meeting where the council will vote on whether to proceed with the next stage of analysis and acquiring Xcel Energy's distribution system.

Councilman Ken Wilson said he has concerns about not having enough information to assess the city's analysis and make an informed decision, but several other council members, who have favored municipalization, said the analysis was very thorough and they feel comfortable moving forward.

Councilwoman Suzanne Jones said the analysis was so conservative that it's likely Boulder could see additional cost savings and greenhouse gas emissions cuts from more local generation of wind and solar power and better technology.

Bob Lachenmayer with Schneider Electric, one of the city's consultants, said the city has the opportunity to create a utility of the future that would have a much more advanced, interactive distribution system. He pointed to trends of large companies generating much of their own power and relying on the grid as backup.

The utility of the future is an energy services provider, not a commodity provider, and has a different relationship with its customers, he said.

Wilson asked whether those goals would be achieved faster by working with Xcel.

Lachenmayer said that's a hard question to answer, but that the best results would be achieved with a willing partner in collaboration and innovation.

Councilwoman Suzy Ageton said she has concerns about the lack of information about Xcel's infrastructure, including the condition it is in, because Xcel has not given access to engineers working for the city.

"It gives me real pause on whether we have a real handle on costs, on startup costs and on ongoing maintenance costs," she said.

She urged the city to remain open to other partnerships with Xcel.

"Our community understands this as an exploration," she said of the process so far. "It's like a funnel. We are narrowing more and more toward municipalization. I hope we can keep at least a little opening for other options."

Boulder Mayor Matt Appelbaum said the citizens group can provide valuable input, but it needs to stay focused.

"I would be very cautious about setting a firm deadline about what needs to come out of that group and making sure we don't go down a lot of dead ends and rabbit holes," he said. "You could research endless permutations."

Ageton noted that it will be a future council with different members that ultimately votes on municipalization.

"I hope that that council will think long and hard about giving the community the opportunity to vote on this," she said. "I know there is no requirement to have a vote, but this is a huge decision that will affect everyone in the community."

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